Page 1

2905 germany



Page 15

29.05.10 Music Week 15



MAKING ITS MARK After a 10-year spell of doom and gloom, the German music industry is back on its feet and posting strong results. Physical, digitial and live are thriving, with home-grown acts in particular doing good business. We look at a country with its sights now set firmly on the future International By Olaf Furniss

THE GERMAN MARKET IS BEGINNING to assume a quiet optimism again. The decline in physical sales for 2009 was a relatively low 5.3%, which, combined with the long-awaited rise in digital market of 22.9%, meant recorded music sales fell by a modest 3%, according to IFPI figures. Further statistics published by the organisation show that, out of a population of 82.3m, the proportion buying music rose from 39.6% to 39.8%, while domestic repertoire continues to rise. And physical sales account for 85% of revenue, making it the secondhighest proportion in western Europe after Portugal. “CD sales have remained encouragingly stable,” says Universal Music Germany CEO Frank Briegmann, citing exclusive special editions in high-price segments. Other senior industry figures outline other factors for the continued popularity of the CD, with the IFPI’s Stefan Michalk pointing to the relative conservatism of German consumers, which results in both record com-

“In the Eighties there was a bubbling feeling of creativity in Stockholm… in the past five years I’ve sensed that same feeling in Berlin” WILLARD AHDRITZ, KOBALT

panies and retailers continuing to work the format. This is echoed by Sony Music Entertainment GSA CEO Edgar Berger, who points to retail giants Saturn, Media Markt and Amazon’s continuing commitment to physical product, along with the fact that the physical sales decline in Germany started earlier than in other territories. Despite CD’s enduring appeal in Germany, it is the increase of 22.9% in value of download sales which is particularly welcome among executives. While this double-digit rise reflects a relatively underdeveloped market playing catch-up, Sony’s Berger also believes that the number of online stores is also playing a part. “Germany has more than 40 legal download platforms – more than the UK or the US,” he says. Yet even when it comes to buying legal downloads, it appears that the German consumer still exercises more traditional buying habits, with 39% of value stemming from people buying entire albums, compared to 36% in the UK. Moreover, single-track purchases accounted for a relatively modest 28% compared to 44% on the other side of the North Sea. Meanwhile, illegal downloads continue to fall. A study of 10,000 people compiled by the GFK organisation revealed that the unit figure fell from 316m in 2008 to 258m last year.

Despite this drop in piracy, there remains frustration that the coalition between Angela Merkel’s centre-right CDU party and the liberal FDP has failed to offer any tangible protection against piracy. “Strong protection of copyright is mentioned in the coalition treaty,” explains Michalk. “[But] still the strong data protection laws and general awareness for data protection is in conflict with effective action to fight internet piracy.” Others are less diplomatic: “Our politicians think that sending a text message is ultra-hip,” complains one senior executive who has experience of engaging with the main parties at national level.

Rooted in the Reeperbahn Germany’s thriving live scene Ever since The Beatles cut their teeth in Hamburg 50 years ago, Germany has been an attractive live destination for foreign artists. A fantastic range of venues, events, promoters and agents all cater for a public hungry for gigs. Small- and medium-sized festivals such as Melt, Haldern and Omas Teich have carved out their place on the annual calendar, while on the bigger side Live Nation-owned Rock Am Ring celebrates its 25 birthday this year. “As a tour destination it is perfect,” says Thorsten Seif, managing director of Buback, a Hamburg-based booking agency, label, publisher and management company. “Regardless of whether you are in a small, medium or large city, there is venue catering for every type of music.” Ingo Beckman, director of the Munich-based Target Concerts agency, which boasts a predominantly international roster including Primal Scream, LCD Soundsystem

and The Chemical Brothers, adds that there has been a discernable rise in international acts touring the country. According to Stefan Lehmkuhl, head of the Melt! Booking agency and organiser of both the Berlin an Melt! Festivals, Germany’s festivals are particularly popular with punters from the UK. “About a quarter of the Melt! Festival tickets are sold to non-Germans; we had about 2,500 Brits last year,” he notes. This is attributed to the likes of Oasis appearing on the bill, affording UK fans the opportunity to see their heroes in a more intimate setting. As a result, these music tourists are also being exposed to domestic talent such as Deichkind, firm festival favourites in Germany. “When Deichkind played the big festivals there were agents from Denmark, the Netherlands and France who were all keen to book the band,” says Seif, who manages the act. However, despite these positive developments, Jens Michow, president of the IKDV, which represents the German live music business, sounds a note of caution. “In 2008, after 12 years of continuous growth, we had

to face a fall in revenue of 7% - the turnover fell from €3.8bn to €3.5bn,” he says, predicting that results for 2009, which are due to be published in July, will reveal a further decline. Nevertheless, he points out that turnover does not always reflect profit and also welcomes last year’s reform of the withholding tax system applied to bands. Universal and Warner have added booking agencies to their operations in recent years, in a move which has already led to acts moving from independent agents to the majors. “It’s not good for competition, but bands and managers have to decide what is in the artists’ best interest,” says Beckmenn. Regardless of how the German live business develops, the opportunities it offers to international acts are likely to continue. “Everyone wants to come here to sell their music,” says Alex Shulz, managing director of Hamburg’s Reeperbahn Festival. Fifty years on, it seems some things have not changed.

PICTURED International appeal: Cascada and Rammstein are two of German music’s biggest international exports

2905 germany



Page 17

29.05.10 Music Week 17


Universal’s Briegmann is more measured and feels encouraged by the establishment of a Government commission tasked with looking at digital issues. However, he believes that legislation must come soon. “Germany needs to be much faster,” he says. “Especially since France and the UK have shown that copyright offenders can be targeted successfully with campaigns involving rights owners, internet service providers and the executive authorities.” While German record companies continue to lobby for more robust legislation to protect copyrights, they have also taken steps to adapt to the changing market conditions. Warner and Universal have both established booking agencies (see box 1), with the former also offering a merchandise service and the latter teaming up with Germany’s huge Sparkasse network of banks to launch the Sound Account credit card, which comes with 120 free downloads per year, a fan shop and competitions. The German industry has traditionally proved adept at marketing and forming alliances with third parties. However, in recent years it has also been focusing on overcoming an A&R crisis. One insider refers to this as the “Eurotrash cocktail”, which came about through a combination of ecstasy, cheap studio technology and the music channel Viva, which had a penchant for disposable dance/pop singles. While breaking new talent has proved particularly challenging outside TV talent shows, domestic acts continue to account for a larger proportion of market share. Last year’s best-selling album was Peter Fox’s German-language release Stadtaffe, while in third place was Nichts Passiert, another German-sung release by Silbermond. The latter is particularly encouraging because the band are relative newcomers – high sales figures are traditionally the domain of established acts with loyal fanbases. This is further underlined by the growth of schlager, Germany’s most enduring genre, for some a guilty pleasure but for many more simply a pleasure. In

2009 schlager’s traditional pop sound accounted for 8.6% of the market, the highest proportion it has achieved in eight years. When coupled with the 1.9% share the similar-sounding volksmusik claims it is even more remarkable, as only pop (35.5%) and rock (18.9%) boast a higher share. Based in Berlin, Kobalt Music Group handles sync plugging, deals with lawyers and collection societies and has stepped up its German signings during the past three years. And having come fourth on album chart share in the territory during the first quarter of 2010, Kobalt managing director Matthias Kind is in no doubt that it is worth being in the market. “In Germany traditional publishing contracts are usually based on the GEMA distribution scheme, which provides a 60/40 split in mechanical royalties and an 8/12 or 4/12 split in performance royalties for life of copyright,” he explains. Kobalt founder and CEO Willard Ahdritz believes Germany’s addiction to TV talent contests and thriving creativity is paying dividends. “When I founded Telegram Records & Publishing in Sweden in the Eighties, there was a feeling of creativity in Stockholm,” he says. In the past five years I’ve sensed that same feeling about Berlin as a thriving creative centre.” The company is also taking an innovative approach when it comes to boosting the profile of its local acts outside their traditional GSA market. In 2008 it engineered the collaboration between two of its clients: Germany’s most successful solo star Herbert Grönemeyer and UK act Antony & the Johnsons, which led to the track Will I Ever Learn. This strategy has also been used to link up German act Stan Four with Esmee Denters, who is signed to Justin Timberlake’s Tennman Records. It is a paradox that, while domestic talent is grabbing an increasingly bigger market share, German acts also appear to be gaining traction overseas. Universal has a solid track record of successfully breaking German acts abroad, most notably with Rammstein and Tokio Hotel. And at the time of going to press, Germany’s Eurovision 2010 entry Lena Meyer Landrut, who is signed to the major, is tipped as a favourite to win, potentially delivering further crossover success outside GSA.

Moreover, Warner’s English-language rock‘n’roll covers act The Baseballs are this week celebrating the Top 10 UK success of their album Strike, which recently picked up an Echo award. But while some German acts eyeing international success sing in English, today’s online distribution enables artists to access consumers with material in their native language. This is the case with electronica act Jeans Team – whose Keine Melodien was used on a VW Golf ad – as well as electro/punk act Frittenbude. The latter are released via Hamburg indie Audiolith, which also boasts a booking agency and publishing company. “Audiolith acts have played Russia, Croatia, The Netherlands and Poland,” says label founder Lars Lewerenz. “When the beats drop everybody dances and people don’t care about that lyrics are in German.” His company was formed in 2003, a particularly bad year for German labels, both major and indie. However, it seems its adoption of a model including revenue from booking, publishing and merchandising has helped it prosper. For Hamburg’s Buback company, which has a comparable structure and also manages festival favourites Deichkind, business is also booming. “We are doing really well, but all around us, small indies are having an increasingly difficult time,” says managing director Thorsten Seif. Nevertheless, other independents who have adapted and diversified, including Edel, Indigo and Ministry Of Sound Germany, continue to enjoy success. And while it is perhaps too early to talk of a magic formula, it is encouraging that some companies are beginning to emerge from the mire. As one executive puts it, “We were first to go down the toilet and hopefully we will be the first to come out.”

PICTURE Glory bound?: Universal Germany signing Lena Meyer Landrut is being tipped by many as a favourite to win this year’s Eurovision Song Contest

Germany industry figures 2005-2009 2005 Digital trade value (US$m) 43.5 CD music sales (m) 114.7 Single-track sales (m) 17.5

2006 77.2 114.4 26.0

2007 92.7 113.3 34.5

2008 126.5 105.1 43.2

2009 155.5 103.3 49.2

source: IFPI

Conferences calling Germany’s network of industry events

When Popkomm organisers Berlin Messe announced that the trade fair would be cancelled in 2009, few could have predicted that a year later several German cities would be vying to host the country’s key music business event. The beginning of May saw Leipzig’s Pop Up convention, which was established several years ago to serve the grassroots indie sector. It will be followed by Cologne’s CO Pop in June, then Berlin Music Week and Hamburg’s Reeperbahn Festival, which both take place in September. Many of CO Pop’s panel participants hail from digital

companies and topics are peppered with business buzz words such as strategy, leadership and creative, while its live music programme appears to be geared to providing an interesting and eclectic mix of both German and international acts. Berlin Music Week sees a number of events in the German capital come together under its banner. These include the Berlin Festival, an exhibition element under the Popkomm brand and seminars organised by All 2Gether Now, which was launched in 2009 to fill part of the gap left by Popkomm’s cancellation. All 2Gether Now programme director Andrea Goetzke will devote the first two days to discussion topics suggested in advance by delegates, with the most relevant to be added to the seminar programme coinciding with the Popkomm exhibition. Meanwhile, some showcases will be incorporated into the Berlin Festival, while others will take place at the Kulturbrauerei venue complex. “It was difficult to get off the ground but now everyone is singing from the same song sheet,” says Popkomm managing director Ralf Kleinhenz. Over in Hamburg, the Reeperbahn Festival added to

LEFT Local heroes: German stars Tokio Hotel with Universal Music Germany CEO Frank Briegmann

last year’s multi-venue extravaganza by launching its Campus initiative. Coordinated by former Popkomm seminar organiser Manfred Tari, it will also host the AGM of live music organisation IDKV. According to Reeperbahn Festival managing director Alex Schulz, the launch of the Campus element last year caused confusion abroad. “People kept asking us, ‘What’s going on in Germany?’” he says, emphasising that, while the situation is new to his own market, it is not different to the UK, which boasts numerous conference events. “You have to make the same decision in the UK,” he adds. “Do I go to Liverpool Sound City or do I go to The Great Escape?” For those interested in showcases above seminars, there are opportunities. Schulz and Berlin Festival organiser Stefan Lemke are on friendly terms and neither rules out booking the same band to play at their respective events. Anyone wishing to tour Germany in September might be advised to contact both and get the best of two worlds.


Music Week feature

Read more
Read more
Similar to
Popular now
Just for you